Taxation and Investment in Argentina

Taxation and Investment in Argentina 

 

Taxation and Investment in Argentina

Taxation and Investment in Argentina

 

Taxable income and rates

Argentine residents pay tax on their worldwide income; nonresidents pay tax only on their Argentine-source income.

Taxable income

Employment income, including most employment benefits, is taxable, as is income derived from the carrying on of a business or profession. Rental and interest income also is subject to tax.

Taxation and Investment in Argentina 

Argentine-source financial income is exempt (e.g. interest on time deposits in local banks, interest from bonds, etc.). As from 23 September 2013, dividends and other profits distributed by Argentine entities are subject to a 10% tax, and gains derived by Argentine resident individuals from the sale of shares, bonds and other securities not listed on a stock exchange or authorized for public offering are subject to income tax at a 15% rate.

Taxation on a foreign individual with an employment contract for up to five years applies only on Argentine- source income, as long as the individual holds a temporary visa.

Deductions and reliefs

Rates

Inheritance and gift tax

Net wealth tax

• 0.5% for amounts over ARS 305,000 up to ARS 750,000;
• 0.75% for amounts over ARS 750,000 up to ARS 2 million; • 1% for amounts over ARS 2 million up to ARS 5 million; and • 1.25% on amounts over ARS 5 million.

Real property tax

Social Security Contributions

Some deductions apply to a number of personal allowances in computing taxable income (e.g. a special employee deduction, an additional deduction for a spouse or child, etc.) upon complying certain requirements. Subject to restrictions, some deductions apply for, among other things, medical expenses, Medicare, and certain donations. Also, mortgage interest, retirement annuities and the cost of domestic help.

Indeed, rates are progressive, ranging from 9% to 35%. In addition, professionals working in the country for no more than six months during the year are subject to a single and final income tax withholding of 24.5%.

Even though Argentina does not levy an inheritance or a gift tax, Buenos Aires and Entre Rios do apply such a tax.

Then, the worldwide assets of individuals residing in Argentina held as of 31 December each year are subject to the personal assets tax to the extent the aggregate value of such assets exceeds ARS 305,000. Deposits in local banks and public bonds are exempt.

 

Taxation and Investment in Argentina 

The net wealth tax rates are as follows:

Taxation and Investment in Argentina

Taxation and Investment in Argentina

First, with respect to holdings of shares in an Argentine company, the issuer deducts a final withholding tax at the rate of 0.5%.

Moreover, foreigners coming to Argentina for employment purposes for a period not exceeding five years have no legal domicile in Argentina. Thus, taxation applies only to their Argentine assets. Furthermore, Argentine and foreign individuals living abroad are subject to personal assets tax only on their Argentine assets. Also, a substitute taxpayer is in charge of the payments.

Similarly, the provincial governments levy a real property tax on urban and rural land, with the rate depending on the jurisdiction. Thus, the tax base for the real property tax generally is the fiscal value of the property the corresponding authority determines.

On the one hand, the financing of the Social Security system is through an employer contribution of 17% or 21% of payroll (without a cap and based on the size and activities of the employer) and an employee contribution of 17% of salary (up to a monthly cap).

On the other hand, the health care scheme is financed with funds through an employer contribution of 6% of payroll (without a monthly cap) and an employee contribution of 3% of salary (up to a monthly cap).

Taxation and Investment in Argentina

Taxation and Investment in Argentina

Taxation and Investment in Argentina 

Self-employed individuals must make their own monthly contributions consisting of a fixed amount.

Other taxes

There are no other taxes on individuals.

Compliance

The tax year for individuals is the calendar year.

Individuals who derive only employment income (that does not exceed ARS 144,000 annually) do not need to file an income tax return to the extent tax was withheld at source by the employer. Individuals with other types of income must make five prepayments at bimonthly intervals beginning in June of the tax year. Final payments of tax are made upon submitting the tax return (on an annual basis) in April or May of the year following the year in which the income was derived.

Foreign taxpayers do not need to file tax returns if their income tax liability is fully satisfied by withholding taxes on their income from Argentine sources.

 Taxes on individuals

Individuals are subject to income tax, wealth tax, and social security contributions.

Income tax rates

Capital gains tax rates

Basis

Double taxation relief

Tax year

Advance payment

Return due date

Dividends Interest
Royalties

Net wealth tax

Social security

Inheritance tax

Real estate tax

VAT

 








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